A recent poll by the Institute of Student Employers (ISE) reports larger pay rises for apprentices than graduates. We find out more.

The ISE has conducted a recent poll on salaries and reports that graduate salaries have risen at a record rate this year. Interestingly, they have also found that pay rates for apprentices continue to grow faster as employers compete in a tight labour market. The poll shows that graduates have had an average pay rise of seven percent this year. This depends on market sector and demand for specific skill sets as some graduates have enjoyed salary increases of twenty percent. However, salary increases for apprentices have increased on average by eleven percent and some as much as fifty percent.

The figures suggest that this is the largest pay rise in 20 years. On average, graduate salaries have risen two percent per year since 2002. The last time pay increases spiked in the same way was just before the 2007 / 2008 financial crash. They went up by five percent in 2006.

The introduction of the apprenticeship levy in 2017 has been responsible for school and college leavers enjoying salary increases that are more rapid than graduate salary increases. Salary increases are directly related to marker sectors where key skills are needed and there is a skill shortage. Not surprisingly the highest pay increases can be found in the digital sector.

Nicola Lamplough, Head of Early Careers at Experian commented: “Due to the increased competitiveness in the market and our ongoing investment in our early careers pipeline, we have increased the entry salaries of the 2022 cohort by 10% for graduates and degree apprentices this year. As a world leading data company, the majority of the roles we recruit in the UK for our early careers programmes are in the tech/digital sector. They include roles like software engineers, IT application support and data analysts, which are becoming increasingly competitive as more companies look to hire in this sector.”

In the ISE poll employers explained that their main reasons for increasing salaries were to remain competitive in a tight labour market and to meet both rising inflation and cost of living. Stephen Isherwood, Chief Executive at ISE said: “Higher salaries are a clear indication of a healthy recruitment market. We have surpassed pre-pandemic levels of hiring and it’s competitive out there. High salaries are one way to win the war for talent, but we’re also seeing additional benefits being offered such as support with wellbeing and flexible working patterns. Apprentice salaries come from a lower base rate so they continue to increase faster on the whole. This year many employers are responding to the challenges young people are facing from the rising cost of living. The true test of the strength of the graduate and school leaver labour market will be in the autumn when we will see if the economic headwinds have caused problems for employers.”

If you would like further information on apprenticeships and how to apply for them, talk to the Apprenticeship Support by Be More Team. The team is funded by the European Social Fund & LCR Strategic Investment Fund and provides impartial information and advice on apprenticeships across the Liverpool City Region.